Money & Banking

Lockdown effect: After a rise, digital payments decline

Surabhi Mumbai | Updated on April 08, 2020 Published on April 08, 2020

Digital payments are seeing a sharp decline during the national lockdown after an initial upswing as consumption has fallen with the closure of shops and restaurants and a freeze on travel and tourism in the wake of the coronavirus pandemic.

Digital payment players that had initially reported higher volumes in online and digital spends, as more people began to work from home in March, are now registering a drop in transactions

“Initially, before the lockdown, when people began working from home, digital spends went up by about 10 per cent to 15 per cent,” Harshil Mathur, CEO and Co-founder, Razorpay, told BusinessLine.

He noted that following the lockdown, now almost everything is shut down; even grocery and e-commerce, which were growing, have largely stopped. “All payments are down at an overall level by 30 per cent. The only transactions thatare happening at presentare purely digital ones such as mutual fund purchases and bill payments. There are hardly any physical and retail purchases happening now,” he said.

Payment gateway Razorpay revealed that digital spending increased by 10 per cent on its platform between mid-February and mid- March, and payments through UPI increased by as much as 19.6 per cent.

According to e-commerce authentication processor, Wibmo Inc, online shopping fell by as much as 30 per cent on March 22, which was the day of the Janata Curfew. “In the following week, Indian consumers returned online, however, with a significant change in behaviour,” it said.

Releasing insights on consumer shopping behaviour for card transactions, it said that consumers leaned into online bill payments with more than 70 per cent transactions in that category. Overall online purchases continue to see a dip of 16 per cent as many services such as travel have come to a standstill. “During the lockdown, while online bill payments increased, food and beverage delivery apps and financial services took the maximum hit. Categories such as gaming and entertainment stayed steady for the most part,” it said in a report on Wednesday.

“We process more than 2.2 billion transactions annually, giving us insight into consumer behaviour and spend patterns. The shift in online purchases was inevitable as our consumers stay at home during this tough period,” said CEO Govind Setlur.

Bharat BillPay

Data with the National Payments Corporation of India (NPCI) for March had shown that while digital payments continued to be robust, there was a marginal decline in all modes, including UPI and IMPS. Only Bharat BillPay registered growth in transactions last month, as more consumers used this platform to pay their utility bills during this period of home isolation and social distancingto prevent the spread of Covid-19.

Published on April 08, 2020

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